- EUR / JPY hit new lows near 129.40 earlier on Wednesday.
- The strong mood of the dollar continues to weigh on the single currency.
- US 10-year yields are trading without clear direction at around 1.64%.
The additional selling pressure on the European currency dragged the EUR/JPY to new lows in the 129.40 area on Wednesday.
EUR / JPY watch out for returns, risk trends
EUR / JPY resumes falling and quickly leaves Tuesday’s rally behind. The continuation of the downtrend reached the 129.40 zone before rebounding early in the session. A Fibonacci level (from the October rally) also coincides in this area and is considered the last defense before a fall to the October lows around 128.30.
The lack of direction in US 10-year yields prompted the dollar to reverse some of the initial advance, while mixed results from the US real estate sector also helped the dollar rise.
The European economic agenda showed that the final October CPI in the euro area rose 4.1% year-on-year and 2.0% relative to the underlying CPI. In Japan, the trade deficit narrowed to 67.4 billion yen in October (from 624.1 billion yen) and orders for machinery and tools expanded 12.5% ​​in the year through September.
Technical levels
So far, the cross is losing 0.26% at 129.64 and a breakout of 130.18 (100-day SMA) would expose 130.49 (200-day SMA) and then 131.41 (November 10 high). On the downside, the next support comes at 129.41 (78.6% Fibonacci from the October high) followed by 128.33 (October 6 monthly low) and finally 127.93 (September 22 monthly low).
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